42. Williamson does not believe that Laderer, Broderick, Reiter or anyone else intentionally lied to or misled him with respect to information provided in November or December of 1992, although Williamson contends that these individuals were grossly negligent in the discharge of their fiduciary duties.
43. Osram Sylvania, Inc., did reduce the workforce, including the workforce at the Towanda facility, after the sale.
44. The reduction in force was done by offering a voluntary termination first, then by involuntary layoffs, a method which had been employed by GTE in the past.
45. Following his retirement, Williamson's job was filled and was not eliminated in the reduction in force.
46. There was a reduction in the Purchasing Department when Richard Dunn accepted the voluntary program and was not replaced.
47. In late January or early February of 1993, a Human Resources Team was formed for the purpose of, inter alia, recommending a method of reducing the workforce.
48. The Human Resources Team presented its recommendation as to the method of reducing the workforce to the Osram Sylvania Board of Directors in a document dated February 17, 1993.
49. The method recommended within the February 17, 1993, document was approved by the Osram Sylvania Board of Directors.
50. The voluntary separation program was announced to the Towanda employees in writing on March 12, 1993.
51. All employees who opted to elect the voluntary termination program at the Towanda plant were accepted.
52. GTE agreed, in an Employee Transfer Agreement signed as part of the stock purchase agreements, that it would reimburse Osram for the incremental costs of providing an enhanced severance benefit to employees terminated within a year after the closing.
53. GTE and Osram had a dispute over whether GTE was required to reimburse Osram for severance costs attributable to employees who volunteered for reduction pursuant to the voluntary termination program offered on March 12, 1993, with GTE contending that voluntary separations were not contemplated.
* * *
For the sake of brevity and clarity, the facts may be summarized as follows:
In 1992, the corporation which employed Williamson, a subsidiary of GTE, was to be sold to Osram. During the pendency of the sale, plans were made for the transition, some of which were made known to personnel within GTE. An Osram internal document indicates that there was to be a reduction in force after the sale and that a Human Resources team would be formed to determine how to go about implementing the reduction. One of the options available was a voluntary severance program. There is no direct evidence, however, that plans for a voluntary severance program were made known; in fact, no Human Resources team had yet been formed, so no final decision on a voluntary severance program had been made.
Meanwhile, Williamson was gathering information with respect to making a decision on retirement before December 30, 1992, the date on which the cost of retiree medical benefits would increase. A number of other factors, including the effect of the sale and his age, also played a role. Because he had to provide advance notice but could rescind the decision, Williamson elected to retire but would continue working if a more favorable situation arose. The specific favorable situation considered by Williamson was the potential for a voluntary severance program. It was known to employees at GTE that there would be a reduction in force after the sale, and GTE in the past had used voluntary severance as a means to reduce its workforce.
Williamson later learned that, due to a policy change, he would not be able to rescind his retirement decision. However, it was announced on December 11, 1992, that employees who had given notice to retire could rescind the decision on or before December 18, 1992. By this time, Williamson's supervisor had begun the process of finding a replacement. According to Williamson (and therefore accepted as fact for purposes of the motion for summary judgment), he was told by his supervisor that there definitely would be no voluntary severance program, and that there would be a reduction in force which would affect the least senior person in Williamson's department if Williamson rescinded his retirement decision.
On December 18, 1992, Williamson reconfirmed his decision to retire and indicated in a memorandum that his decision was based on the unavailability of a voluntary severance program. A response four days later from the Human Resources Department indicated that the information provided to Williamson was based on then-current information, a qualification Williamson had not heard before.
The sale of the division which had employed Williamson was finalized on January 29, 1993. A that point, the Human Resources team was formed, formed a plan for the reduction in force, and presented it to the Osram board of directors on February 17, 1993. The plan, which was adopted by the board, included a voluntary severance program to be followed by an involuntary severance program if a further reduction in force was necessary. The plan was announced to employees on March 12, 1993. Had Williamson rescinded his retirement decision, he would have been eligible for the voluntary severance program.
III. PLAINTIFF'S CLAIMS
The amended complaint sets forth three causes of action for which Williamson seeks recovery: interference with rights protected under ERISA, in violation of 29 U.S.C. § 1140 (Count I)
; deprivation of benefits due under an ERISA plan, pursuant to 29 U.S.C. § 1132(a)(1)(B) (Count II); and breach of fiduciary duty, in violation of 29 U.S.C. § 1104 (Count III). Each of these claims presumes that ERISA is applicable, based on the existence of an ERISA plan. Defendants' motion, in part, is based on a contention that the voluntary severance program does not constitute a plan under ERISA. Since our jurisdiction is premised on a federal question, which in turn is premised on the existence of an ERISA plan, we turn initially to the question of whether the voluntary severance program constitutes an ERISA plan.
IV. ERISA PLAN
The Supreme Court of the United States, in a slightly different context, has provided a definition of "plan" for purposes of ERISA. In Fort Halifax Packing Co., Inc. v. Coyne, 482 U.S. 1, 96 L. Ed. 2d 1, 107 S. Ct. 2211 (1987), the question was "whether a Maine statute requiring employers to provide a one-time severance payment to employees in the event of a plant closing ... is pre-empted by either [ERISA] or the National Labor Relations Act..." Id. at 3-4 (citations, footnote omitted). The Maine Supreme Judicial Court held that the statute was not pre-empted because ERISA governs plans created by employers or employee organizations, not state legislatures. Id. at 6. The Supreme Court affirmed, but on the basis that the Maine statute did not create a "plan" under ERISA. Id. In doing so, the Court defined "plan" for such purposes.
The Court first noted that ERISA governs "plans," not all employee benefits. Id. at 7-8.
The Court then turned to the intent of Congress with respect to the pre-emption provision of ERISA, 29 U.S.C. § 1144(a). Congress wished to provide uniform standards for administering employee benefit plans, so that employers would not be burdened by regulations which varied from state to state:
It is thus clear that ERISA's pre-emption provision was prompted by recognition that employers establishing and maintaining employee benefit plans are faced with the task of coordinating complex administrative activities. A patchwork scheme of regulation would introduce considerable inefficiencies in benefit program operation, which might lead those employers with existing plans to reduce benefits, and those without such plans to refrain from adopting them. Pre-emption ensures that the administrative practices of a benefit plan will be governed by only a single set of regulations.
Id. at 11. These concerns, however, are implicated only when the administration of a plan is implicated, as opposed to simply benefits. Id.
Further, the primary reason for enacting ERISA was to prevent abuse of funds administered by a plan, as by self-dealing, imprudent investing, and misappropriation of plan funds. Id. at 15. It is the administration of a plan which is potentially subject to such abuse, while this concern is not implicated when there are no on-going transactions to record in an annual report or information to gather because the terms of the benefit are clear. Id. at 16.
The Court next concluded that its holding did not allow employers to circumvent ERISA because the rationale for its holding differed from that of the Maine Supreme Judicial Court. The Court found its rationale consistent with prior cases, summarily affirmed by the Supreme Court, in which courts of appeals had held that severance programs were governed by ERISA. In those cases, the severance programs required administration, and the issue actually was whether plans in which funds were paid from general assets as opposed to trust funds fell within ERISA. Id. at 17-19, 18 nn. 10, 11.
The primary point to be derived from Fort Halifax, then, is that ERISA is implicated only when there is a "plan," and a onetime payment of severance benefits is not a "plan" because there is no on-going administrative scheme. It also should be noted that the Court recited examples of the functions involved in administering a plan, including "determining the eligibility of claimants, calculating benefit levels, making disbursements, monitoring the availability of funds for benefit payments, and keeping appropriate records in order to comply with applicable reporting requirements." Id. at 9.
The Supreme Court's holding in Fort Halifax was interpreted and applied by the Court of Appeals for the Third Circuit in Angst v. Mack Trucks, Inc., 969 F.2d 1530, 1538-1541 (3d Cir. 1992). In that case, the employer had offered a severance program involving an initial payment of $ 75,000.00 and one year of continued benefits (already provided prior to the buy-out). Id. at 1538. The Third Circuit concluded that, as the initial payment did not create an administrative scheme nor impose new requirements on an existing administrative scheme, it did not constitute a plan under ERISA and Fort Halifax. Of course, since the continuation of benefits did not alter any existing scheme, it also did not constitute a plan. Angst at 1540-1541. See also Fontenot v. NL Industries, 953 F.2d 960 (5th Cir. 1992); Wells v. General Motors Corp., 881 F.2d 166 (5th Cir.), reh'g denied, 887 F.2d 1083 (5th Cir. 1989)(table), cert. denied, 495 U.S. 923, 109 L. Ed. 2d 321, 110 S. Ct. 1959 (1990)(cases on which Third Circuit relied to conclude that agreement to continue existing benefits does not constitute a separate plan under ERISA).
Defendants also cite Middleton v. Philadelphia Electric Co., 850 F. Supp. 348 (E.D. Pa. 1994), in support of their position that the voluntary severance program offered by Osram is not a plan under ERISA. In Middleton, the employer offered a severance program which included a lump sum payment of 3 weeks' pay for each year of employment, with a maximum of 18 months' pay, and continuation of certain existing benefits for 18 months. Id. at 349. The court reviewed the applicable provisions of ERISA and the holding of Fort Halifax, and concluded that the program did not constitute a plan under ERISA. Id. at 353-354.
In reaching this conclusion, the court relied heavily on certain factors: there was no new administrative scheme created; once an employee opted to participate in the program, the calculations required were merely clerical or ministerial in nature; the employee could reject the program, so that other options offered during the reorganization were not relevant; and there was no discretionary analysis of eligibility. Id. at 353. Authority for each of these considerations is set forth. Id. at 352-353, 353 n. 5.
In this case, the terms of the program offered to employees at the Towanda plant of GTE/Osram Sylvania included:
(1) the employee was eligible if he or she met the retirement criteria of either GTE or Osram Sylvania;